Why sez is important

With the development of such propositions, however, comes the need for a much deeper understanding of the comparative advantages needed for a sector or even sub-sector to ensure sustainable success of not just the one industry — but the economic outcomes for the host economy.

As such, soft infrastructure is more important than ever: suitability of the regulatory regime; robust legal infrastructure to support IP rights and overcome business failures; the overall ease of doing business; the strength and consistency of institutions; and a compelling lifestyle proposition, coupled with intelligent incentives packages, are critical to a new SEZ proposition. In our experience, a crucial aspect closely scrutinised by any potential investor in an SEZ is the governance model.

Often, the primary catalysts for the creation of an SEZ are the institutional shortcomings in the host base economy, hence the governance of that zone must offer transparency, efficiency, consistency and security to succeed. A material ingredient to its success can be attributed to its governance model most famously the independent judicial system based on English law to provide a compelling business environment for such economic activity.

Ultimately, SEZs should be a catalyst or transitional tool towards the integration of economic activity within the base economy itself. Positive spillover effects can come in the form of enhanced economic productivity, newly available technology, and local social welfare effects on the domestic population FIAS, ; Wang, ; Ge, Zeng, Table 2 provides a list of possible benefits from successful SEZ programs.

Skip to main content. Search Search form Search. Table 2. Previous Chapter II. Next Chapter IV. Conclusion References. Share this page. Clyde D. Asian Survey, Springer, Your Privacy Rights.

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Your Practice. Popular Courses. Economy Economics. Key Takeaways A special economic zone SEZ is an area in a country that is subject to different economic regulations than other regions within the same country. The economic regulations of special economic zones SEZs tend to be conducive to—and attract—foreign direct investment FDI.

Special economic zones SEZs are typically created in order to facilitate rapid economic growth by leveraging tax incentives to attract foreign investment and spark technological advancement. While many countries have set up special economic zones SEZs , China has been the most successful in using SEZs to attract foreign capital.

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